ACADEMY TRADING LTD AND OTHERS v. GREECE



                      AS TO THE ADMISSIBILITY OF

                      Application No. 30342/96

                      by Academy Trading Ltd and others

                      against Greece

      The European Commission of Human Rights sitting in private on

26 May 1997, the following members being present:

           Mr.   S. TRECHSEL, President

           Mrs.  G.H. THUNE

           Mrs.  J. LIDDY

           MM.   G. JÖRUNDSSON

                 A.S. GÖZÜBÜYÜK

                 J.-C. SOYER

                 H. DANELIUS

                 F. MARTINEZ

                 L. LOUCAIDES

                 J.-C. GEUS

                 M.P. PELLONPÄÄ

                 B. MARXER

                 M.A. NOWICKI

                 I. CABRAL BARRETO

                 B. CONFORTI

                 N. BRATZA

                 I. BÉKÉS

                 J. MUCHA

                 D. SVÁBY

                 G. RESS

                 A. PERENIC

                 C. BÎRSAN

                 P. LORENZEN

                 K. HERNDL

                 E. BIELIUNAS

                 E.A. ALKEMA

                 M. VILA AMIGÓ

           Mrs.  M. HION

           MM.   R. NICOLINI

                 A. ARABADJIEV

           Mr.   H.C. KRÜGER, Secretary to the Commission

      Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

      Having regard to the application introduced on 30 November 1995

by Academy Trading Ltd and others against Greece and registered on

29 February 1996 under file No. 30342/96;

      Having regard to the report provided for in Rule 47 of the Rules

of Procedure of the Commission;

      Having regard to:

-     the reports provided for in Rule 47 of the Rules of Procedure of

      the Commission;

-     the observations submitted by the respondent Government on

      11 December 1996 and the observations in reply submitted by the

      applicants on 17 February 1996;

      Having deliberated;

      Decides as follows:

THE FACTS

      The applicants, Academy Trading Ltd., Intercontinental Maritime

Ltd., Aaron Maritime Ltd., Evie Navigation Co. Ltd., T.C. Trading

Company Ltd. and Andros Trading Ltd, are shipping companies,

incorporated under the laws of the Republic of Liberia.

      Before the Commission, the applicants are represented by

Mr. Nicholas Scorinis, an attorney-at-law practising in Piraeus.

      The facts of the case, as submitted by the parties, may be

summarised as follows.

      In 1977 the C. bank (herein-after "the bank"), being a prime

lender to the Greek shipping community, granted a $ 14.8 million loan

to a group of companies under the ownership of G.T., a Greek-American

shipowner. The applicants, also under the ownership of G.T., were among

the guarantors of the loan.

      On 21 January 1982 the applicants brought an action for damages

against the bank and three of its Greek senior officers before the

Athens First Instance Civil Court (*Polimeles Protodikeio). The

applicants argued that because of a shipping crisis they had been

unable to meet repayment instalments of the loan and that in 1979 they

had been obliged to sell two ships at below their insured and actual

value to another client of the bank, who had been given generous

financing terms in order to take over the vessels. Eventually other

vessels in the fleet were put under the same management prior to their

being sold to the management company. The applicants alleged therefore

that the bank had acted contrary to business morality under the Greek

Civil Code.

      On 1 November 1982, by decision No. 14803/1982, the First

Instance Civil Court ordered the parties to submit further evidence.

      On 20 November 1987, by decision No. 8027/1987, the First

Instance Civil Court dismissed the applicants' action as being ill-

founded.

      On 29 January 1988 the applicants lodged an appeal with the

Athens Court of Appeal (Efeteio).

      On 31 January 1989 the Court of Appeal declared the appeal

admissible without prejudging the merits and ordered a new hearing in

order to submit further questions to the parties. The new hearing was

held on 15 February 1990.

      By decision No. 5025/1990, the Court of Appeal unanimously

overturned the decision of the First Instance Civil Court and granted

the applicants' claim. In a 60 page judgment, the Court established

that the bank, at a time of shipping crisis, rejected a request by G.T.

for an extension of time to pay off his debt and for a small amount of

capital which would have enabled him to tackle urgent cash problems,

despite the fact that he had already repaid 63.25 % of the loan granted

to him and that he had never been late in making payments. As a result,

G.T.'s business went bankrupt and the bank took over the management of

his ships. The vessels were subsequently sold and the bank provided the

new owner with the credit facilities it had previously refused to G.T..

      Therefore, the Court considered that it was "against morality for

a bank to exploit its dominant position towards its counterpart during

a period of financial crisis by cruelly prosecuting it instead of

extending financial facilities which are customary in banking

transactions during such periods". The Court awarded the applicants

$ 7.75 million plus interest at 25 % per year back-dated from

20 February 1982.

      The above judgment created a stir in the local shipping

community. Several publications appeared in the local and international

shipping press, stressing the impact that the judgment would have on

future ship credits. A number of cases started to be prepared against

banks. The C. bank, who had already appealed in cassation (********)

on 21 May 1990, threatened to withdraw from the Greek market altogether

if the Court of Cassation (Areios Pagos) upheld the judgment of the

Court of Appeal.

      On 29 May 1991, by decision No. 925/1991, the First Chamber of

the Court of Cassation overturned the judgment of the Court of Appeal

on the ground that the bank had not acted contrary to business morality

and that the attacked judgment was not sufficiently motivated. The case

was then referred to the Fourth Chamber for further examination.

      Following deliberations on 14 February 1992, the Fourth Chamber,

by decision No. 1154/1992, ordered the parties to appear in person

before it and to give further explanations about the case. The hearing

was held on 11 December 1992. With the exception of one judge who had

also participated in the deliberations of 14 February 1992 and was the

Rapporteur of the case, the Fourth Chamber sat in a different

composition.

      On 30 June 1993, i.e. six months after the hearing of 11 December

1992, one of the judges participating in that hearing retired. Under

Greek law this implied that if the Chamber had not reached a decision

at that date it could no longer deliberate but should hear the case

again in a different composition. However, no actions were taken at

that stage, which led the applicants to believe that the decision had

already been taken before the retirement of the judge and that they had

to await the delivery of the judgment.

      On 7 November 1993 the applicants inserted an open letter in a

Greek newspaper. In their publication, entitled "Open letter to the

Fourth Chamber of the Court of Cassation", the applicants questioned

the reasons of the delay put by the Chamber in delivering its judgment.

Having received no answer, the applicants addressed on 12 December 1993

a similar letter to the Minister of Justice, the President and the

Public Prosecutor of the Court of Cassation. They again received no

answer.

      On 26 January 1994, the President of the Third Chamber (who had

until summer 1993 been President of the Fourth Chamber) returned the

file of the case to the Secretariat of the Fourth Chamber, accompanied

by a hand-written note which read as follows: "To be further discussed,

in accordance with Article 307 of the Code of Civil Procedure (since

it was ascertained, after the last report, that there is a need of

further deliberation, which is not feasible due to the retirement of

one of the members of the Court)."

      On 20 May 1994 the new hearing was held. The Fourth Chamber was

composed of five judges. The first had participated in the

deliberations of 14 February 1992 and the second in both previous

compositions as Rapporteur. The other three members heard the case for

the first time. One of them, a junior judge, was designated as the new

Rapporteur.

      On 30 June 1995, by decision No. 1198/1995, the Court of

Cassation dismissed the appeal, lodged by the applicants against

decision No. 8027/1987 of the Athens First Instance Civil Court, on the

ground that it was ill-founded. In his dissenting opinion, the judge

who was initially the Rapporteur of the case expressed the view that

the bank had not acted in good faith and that, therefore, the

applicants' appeal should be upheld.

Relevant domestic law

a.    Under Article 300 of the Code of Civil Procedure a decision is

taken by the same judges who participated in the hearing of the case.

b.    Under Article 307 of the Code of Civil Procedure if, after the

hearing of a case, a decision cannot be taken for any reason (namely

death, resignation or removal of a judge who had participated in the

hearing) the case must be reheard.

COMPLAINTS

1.    Invoking Article 6 para. 1 of the Convention, the applicants

complain about the unfairness of the proceedings before the Court of

Cassation. In particular they consider that their case was not heard

by an impartial court. In this respect the applicants allege that even

assuming that the Fourth Chamber of the Court of Cassation had not

reached a decision by the day one of its members retired, there were

no particular reasons why it took six months to find that the Chamber

would have to hold a new hearing. They also complain that this decision

for a new hearing was taken by a judge who was no longer a member of

the Fourth Chamber. Finally, they submit that a new Rapporteur was

designated for the last hearing before the Court of Cassation, despite

the fact that the previous Rapporteur was a senior judge and the only

judge who had participated in all previous hearings. They allege that

this change was made because the initial Rapporteur would have proposed

to uphold the judgment of the Athens Court of Appeal granting their

claim, as was clearly demonstrated from his dissenting opinion inserted

in the text of the final decision.

2.    The applicants also complain under Article 6 para. 1 of the

Convention about the length of the proceedings before the Greek courts.

PROCEEDINGS BEFORE THE COMMISSION

      The application was introduced on 30 November 1995 and registered

on 29 February 1996.

      On 4 September 1996 the Commission (First Chamber) decided to

communicate the application to the respondent Government.

      The Government's written observations were submitted on

11 December 1996, after an extension of the time-limit fixed for that

purpose. The applicants replied on 17 February 1997.

      On 20 May 1997 the case was transferred from the First Chamber

to the Plenary Commission.

THE LAW

1.    Invoking Article 6 para. 1 (Art. 6-1) of the Convention, the

applicants complain about the unfairness of the proceedings before the

Court of Cassation. In particular they consider that their case was not

heard by an impartial court. In this respect the applicants allege that

even assuming that the Fourth Chamber of the Court of Cassation had not

reached a decision by the day one of its members retired, there were

no particular reasons why it took six months to find that the Chamber

would have to hold a new hearing. They also complain that this decision

for a new hearing was taken by a judge who was no longer a member of

the Fourth Chamber. Finally, they submit that a new Rapporteur was

designated for the last hearing before the Court of Cassation, despite

the fact that the previous Rapporteur was a senior judge and the only

judge who had participated in all previous hearings. They allege that

this change was made because the initial Rapporteur would have proposed

to uphold the judgment of the Athens Court of Appeal granting their

claim, as was clearly demonstrated from his dissenting opinion inserted

in the text of the final decision.

      Article 6 para. 1 (Art. 6-1) of the Convention, insofar as

relevant, provides as follows:

      "In the determination of his civil rights and obligations (...)

      everyone is entitled to a fair (...) hearing within a reasonable

      time by an (...) impartial tribunal (...)."

      The Government first argue that the application was lodged out

of time under Article 26 (Art. 26) of the Convention, which requires

complaints to be submitted to the Commission within six months from the

date on which the final decision was taken. They submit that the

application form is dated 22 February 1996, which is more than six

months after the final decision which was taken on 30 June 1995.

      The Government also point out that under the terms of the

declaration made by Greece recognising the right of individual

petition, the Commission is not competent ratione temporis to examine

applications relating to events which took place before 20 November

1985. Therefore, all complaints of the applicants referring to actions

which took place before this date should be dismissed as inadmissible.

      Alternatively, the Government submit that this part of the

application is manifestly ill-founded for the following reasons:

      The Government argue that the note written by the President of

the Third Chamber cannot be considered as a decision of the Court of

Cassation to hold a new hearing, but constituted a mere internal note,

addressed to the court's Secretariat, and that it was within its

author's competence to see to the smooth operation of the Court of

Cassation.

      Furthermore, the Government consider that the alleged delay in

drafting this note did not infringe the applicants' right to a fair

trial, nor does it raise any doubts as to the impartiality of the Court

of Cassation. The Government add that it should also be taken into

consideration that during the judicial vacations period, from 1 July

to 15 September, the courts deal only with extremely urgent cases.

      The Government further submit that the fact that this note was

written by a judge who was no longer a member of the Fourth Chamber,

but still the President of that Chamber at the time of the hearing of

the case and also when one of its judges retired, did not infringe the

applicants' right to a fair trial, nor does it raise any doubts as to

the impartiality of the Court of Cassation.

      As regards the reasons for the change of the Rapporteur of the

case, the Government submit that this change was necessary given the

fact that the case had to be heard again. According to the Government

this change, which follows a well-established practice of the Court of

Cassation, also gave to another member of the Fourth Chamber the

possibility to study thoroughly the case, so that the truth would be

safely found after an exchange and juxtaposition of opinions and

thoughts on the questions raised by the case.

      The applicants reject the respondent Government's observations.

      The Commission notes that the proceedings undertaken by the

applicants ended on 30 June 1995, which is less than six months before

the introduction of their application before the Commission, i.e.

30 November 1995, date of the first communication from the applicants

setting out summarily the object of their application.

      It follows that this plea of inadmissibility, based on the

alleged failure to comply with the six months rule, cannot be upheld.

      As to the substance of the complaint, and in the light of the

parties' observations, the Commission considers that this part of the

application raises serious questions of fact and law, which are of such

complexity that their determination should depend on an examination of

the merits. This part of the application cannot, therefore, be regarded

as being manifestly ill-founded within the meaning of Article 27 para.

2 (Art. 27-2) of the Convention, and no other ground for declaring it

inadmissible has been established.

2.    The applicants also complain under Article 6 para. 1 (Art. 6-1)

of the Convention about the length of the proceedings before the Greek

courts.

      The Government first submit that the applicants have not

expressly complained before the Commission about the length of the

proceedings, and object to the Commission having on its own initiative

taken into consideration the issue of "reasonable time", within the

meaning of Article 6 para. 1 (Art. 6-1) of the Convention.

      Alternatively, the Government submit that the case was heard

within a reasonable time and affirm that the length of the proceedings

is attributable to their complexity in fact and law. The Government

also mention the workload of the Court of Cassation.

       The applicants contest the arguments of the respondent

Government.

      The Commission observes that the applicants have expressly

complained, both in their introductory letter of 30 November 1995 (page

1 in fine) and in their application form (page 4**), about the length

of the proceedings. Consequently, the Commission considers that it has

jurisdiction to examine this complaint.

      The Commission further notes that the proceedings lasted from

21 January 1982 to 30 June 1995, i.e. thirteen years, five months and

nine days.

      The Commission recalls that the period to be considered begins

on 20 November 1985, when the recognition by Greece of the right of

individual petition took effect; however, in assessing the

reasonableness of the time that elapsed after 20 November 1985, account

must be taken of the then state of proceedings (see Eur. Court H.R.,

Foti and others v. Italy judgment of 10 December 1982, Series A no. 56,

p. 18, para. 53). Therefore, the period to which the Commission's

examination relates is nine years, seven months and ten days.

      The Commission considers that, in the light of the criteria

established in the case-law of the organs of the Convention concerning

"reasonable time" (complexity of the case, conduct of the parties and

the conduct of the authorities dealing with the case), the complaint

concerning the length of the proceedings raises serious issues of fact

and law which cannot be resolved at the present stage of the

examination of the application, but calls for an examination of the

merits.

      For these reasons, the Commission, by a majority,

      DECLARES THE APPLICATION ADMISSIBLE,

      without prejudging the merits of the case.

        H.C. KRÜGER                         S. TRECHSEL

         Secretary                            President

     to the Commission                    of the Commission

 

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